Some predictions for 2016 are important and some seem a tad trivial. Fortune forecasts that cyberespionage will rise sharply, but interest rates will not (important). Indiewire.com predicts that Leonardo DiCaprio may finally win an Oscar (trivial).
In our part of the world, the following seven predictions about the African payments industry are important because they will affect our businesses, impact tourism, and change the way payments will be processed.
1. Increased security and regulation for mobile payments
Mobile payments have been taking the African continent by storm for quite some time. Because they are no longer new and as their user base continues to grow, there will need to be some digital payment regulation and oversight in this realm. Regulations should not be feared; if they are done right, they will protect both businesses and consumers from abuse and fraud. In 2016, we expect a rise in security, privacy, and safety, which will come by way of regulations.
2. Widespread use of cryptocurrency
Africans who need access to cross-border mobile money will find an ally in digital currencies in the coming year. Because it is more secure than cash, we will also see wider acceptance of cryptocurrencies like Bitcoin, used in cross-border transactions in Africa next year.
3. The degree of cashlessness of society in the region will increase
When we think of things that may be nearing extinction in Africa, we think of Mountain Gorillas and Black Rhinos; we rarely think of cash. Cash usage is expected to drop in favor of advanced mobile payment apps and technologies. People are using their mobile devices to send money peer-to-peer to family members, as well as to pay for utilities, shop online, television subscriptions, and more. More physical locations (stores, taxies, travel operators, etc.) will accept mobile money online, and credit cards will become more prominent in the region (which we will discuss later). As a result, cold, hard cash will become less commonplace.
4. Big data will be big
As mobile payment technology innovates, grows, and becomes an inseparable part of Africa commerce, operators will rely more heavily on big data to monitor, track, and optimize its usage. The data collected will be aggregated and reported on to revolutionize processes. In 2016, big data will make the mobile money ecosystem easier, quicker, safer, and more versatile.
5. The fight against fraud will gain traction
While fraud will not be eliminated, the fight against it will win important battles in 2016. Improvements in fraud mitigation will come from global assimilation of EMV technology, utilization of big data, and technological improvements in the space (some of which are being developed in African startup incubators throughout the continent.)
6. Easy cross-border payments
Merchants who do business in more than one country are craving a convenient solution for cross-border payments. Service providers have been mounting their efforts in this realm, and 2016 will see the improvement of convenience in cross-border mobile solutions. 3G Direct Pay is the frontrunner, as it is working on making its services accessible and usable by merchants from anywhere in the region.
7. Market share increase for credit cards
Credit card companies are investing heavily in what they call “the cashless continent” of Africa. MasterCard’s pricelessafrica.com and Visa’s partnership with African telecommunications company Bharti Airtel show their determination to maintain their dominance of online payments and mobile payments in Africa. In 2016, locals and tourists in Africa will increase their dependence on credit cards.
What is in store for the African payments industry?
2016 will bring continued growth, new technological advancement, and further protection to online and mobile payments in Africa. The outlook is a bright one with exciting changes and profitable growth.